South Australian Economy - Grievance Debate

May 12th, 2015

Mr KNOLL ( Schubert ) ( 15:27 ): Last week, the member for Kaurna lectured this parliament about so-called conservatives stifling innovation and change in South Australia. His arguments were flawed and hide an underlying truth that is perhaps not as positive as he would lead us to believe. The member cites some fairly obscure statistics to prove his point, stating that 55 liquor licence applications is a measure of a vibrant economy.

I am a fan of the Royal Croquet Club, small bars, pop-up food trucks and the like, but the South Australian story is so much more than that. To this parliament and to the people of South Australia I would say that increased vibrancy is a good thing, it is a good thing, but there is no such thing as a small bars-led recovery. If the simple act of drinking more alcohol could somehow fix the underlying structural problems in our economy I would say, 'Drink another glass of Barossa shiraz. In fact, drink two.' But even if there was such a thing, we would not be having it. ABS statistics show that in 2010 we had 601 pubs, taverns and bars and in 2014 we had 615. Yes, that is right, we had a net increase in new bars of 3.5 bars per annum. Hardly what you would call vibrant growth.

At a statewide level the figures are even worse. At the start of 2010 South Australia had 148,668 businesses. At the end of 2014 we had 143,585, for a net total loss of 5,083 businesses. Why are these businesses closing? According to the Grants Commission, we have the highest taxes in the nation. Water prices are 236 per cent higher than when Labor first came to power. A 2015 UnitingCare report shows that we have the highest electricity prices in the nation.

Contrary to the member for Kaurna's assertion that people are coming back, people are not coming back to South Australia, with an average loss of net migration of 3,300 people per year over the last decade. Property rates and charges are 17.3 per cent higher than they were 12 months ago. Regulation is so burdensome in this state that it is actually keeping people who have jobs from going to those jobs, keeping those people out of work. We only need to look at the 4,000-person backlog currently waiting for background checks to see that fact.

Conservatives are not looking at the 'vibe', as the member for Kaurna asserts: they are looking at the statistics. They are the ones on the ground, laying off staff and struggling to keep things growing, and dealing with the lack of confidence that exists in South Australia. As Ancient Rome was burning, Nero fiddled, instead of dealing with the underlying structural problems with the empire: is this the same thing that is happening here?

We need government to do the boring things, and we need them to do them well. Keep spending modestly and be disciplined to ensure that taxes are lower over the longer term. Invest in fixing the fundamentals of our economy so that South Australia is the best place to do business. Block new regulation that in isolation seems like a good idea but cumulatively boils the proverbial frog. Pop-up bars and small bars have lower regulation burdens than bricks-and-mortar businesses, from planning and development regulations to permanent overheads and full-time staff, the playing field is anything but level.

The answer, however, is not to shut down pop-ups. The answer is not to shut down small bars. It is to find ways to lower unnecessary regulation for all businesses in South Australia and not those chosen few, so that instead of a vibrant Victoria Square or a vibrant Rymill Park, we can have a vibrant South Australia, where our business numbers head north and not south. The Rt Hon. John Key, Prime Minister of New Zealand, said in a speech to the Latin America-New Zealand Business Council:

As a country, we can't get rich simply by selling things to ourselves; we need to be competitive on a global stage and take advantage of international opportunities if we are to lift New Zealand's economic performance.

Since the 2011-12 budget, this Labor government has slashed funding for the main state government program aimed at stimulating exports from $30 million to $19 million. As a result, the latest merchandise export figures are stagnant, at $11.61 billion. John Key is right—vibrancy is not turning on some fairy lights on Bank Street: it is working to improve our export economy and our jobs market. These are the measures by which we should judge our state. Hopefully, by improving these figures, the ensuing real jobs growth may mean that we have a few extra dollars to spend on an extra glass of Barossa shiraz at a small bar in Adelaide.